All posts tagged Regulators

A senior Treasury Department official pushed back against criticism that financial rules are becoming too complicated, saying that it may not be possible to write simple regulations that address a nuanced, complex financial system.

Associated Press

“Simplicity is not always synonymous with smart,” Mary Miller, Treasury’s under secretary for domestic finance, said at an American Banker symposium on financial regulations on Friday.

Miller’s comments come amid broader debate on the best course for regulations governing the financial system. U.S. and international authorities responded to the 2008 financial crisis with new rules meant to rein in risky behavior and better ensure against another round of bailouts for too-big-to-fail banks.

But those rules don’t sit well with many banks and some regulators also are starting to question them.

And last month at a Federal Reserve conference, the Bank of England’s director of financial stability, Andrew Haldane, argued in a paper that regulations have become too complex and therefore less effective.

A federal energy regulator is rejecting Duke Energy’s proposed multibillion-dollar takeover of Progress Energy, delaying or derailing one of the biggest corporate mergers announced this year.

The objecting agency, the Federal Energy Regulatory Commission, conditionally approved the planned merger in September, but gave the companies 60 days to address its concerns that the combined company could reduce competition in the Carolinas power market. Final approval of the deal is subject to those mitigation measures.

UPDATE: In a statement, Duke and Progress Energy said they “remain committed to proceeding with their planned merger.” The companies said they are reviewing the FERC order and are planning to submit a revised proposal to address the agency’s concerns.

Deal Journal colleague Aaron Lucchetti brought us a story about the increasing rolls of bank regulators embedded in the country’s key financial institutions. Unlike reporter “embeds” with American military personnel in Afghanistan, these embeds from the Federal Reserve Bank of New York and the Office of the Comptroller of the Currency aren’t there merely to observe and take notes. Rather, their job is to pore over the books at banks such as Citigroup and J.P Morgan Chase and quiz bank CEOs and directors about their companies’ mortgage-documentation procedures, financial results and exposure to European debt and municipal bonds.

Most of these on-site examiners are hardly household names. But here are some names and backgrounds of the New York Fed’s top embeds –the men and women watching over Wall Street as part of the effort to prevent the next financial crisis.

Nasdaq CEO Bob Greifeld is a man with two masters: money-hungry stockholders of the New York Stock Exchange, and Washington. And Greifeld might be finding it tough to keep both masters happy.

On the one hand, Greifeld has to convince NYSE stockholders to turn down an existing takeover deal from Germany’s Deutsche Börse. Nasdaq and its partner, the IntercontinentalExchange, want to slide in and buy NYSE instead.

But a regulatory review of a Nasdaq-NYSE tie-up won’t be done before NYSE investors head to the polls in July. So NYSE stockholders have to close their eyes and take a leap of faith that Washington won’t kill a Nasdaq takeover, in a deal that would create a U.S. stock exchange powerhouse.

Too soothe wary NYSE investors, Greifeld has expressed optimism that the Department of Justice will go Nasdaq’s way. But Greifeld must have sent too a few too many happy vibes south to Washington DC….

The FCC and U.S. Department of Justice cleared cable company Comcast to take over control of NBC Universal –- a giant media deal announced more than a year ago.

To win approval from the fed, Comcast agreed to some business restrictions aimed at preventing Comcast from using its power to give unfair advantage to its TV channels or online video programming. Overall the government conditions aren’t expected to seriously hamper the deal.

Several analysts said the deal completion could spur Comcast to give back cash to shareholders, including from accelerated stock buybacks or a dividend increase. Wells Fargo analyst Marci Ryvicker said Comcast is unlikely to give much detail about NBC Universal results or potential capital returns in its fourth quarter earnings disclosures slated for Feb. 16. (The NBC transaction is expected to close just two weeks beforehand.)

The proposed sale of $1.5 billion of Facebook stock to Goldman’s wealthiest clients now will exclude U.S. investors after the transaction threatened to raise the hackles of regulators. U.S. securities laws generally bar “solicitation” in private stock offerings, prohibiting banks from hyping a private stock offering in ads or through the media.

The reworking won’t hurt the Facebook stock deal–apparently there are plenty of foreign investors willing to pick up the slack from their U.S. counterparts. But the reversal is embarrassing to Goldman–considered the smartest of the smarties on Wall Street–which looks like it was caught off guard by regulatory and public reaction to the Facebook stock sale.

Here is a look at some of the reaction to the Goldman-Facebook news from writers and investment specialists:

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Dealpolitik is Ronald Barusch's strategic look at deals currently making the headlines as well as the major forces at work in the deal-making world. He was a M&A lawyer with Skadden, Arps, Slate, Meagher & Flom for over 30 years. He retired in 2010 after 25 years as a partner at the firm. Click here for his current and archived columns.